What's going on?

Markets were glittering on Tuesday as the amount of gold held in exchange-traded funds (ETFs) surpassed a record high set seven years ago.

What does this mean?

The gold price has soared in the past month, thanks in part to US-Iran tensions and coronavirus fears. Investors often seek safety in gold during times of uncertainty, as it�s seen as a relatively stable store of value � and for those keen to dive in, the easiest approach is via an ETF backed by bullion and therefore tracking the metal�s value. As money has flowed into those funds, they�ve increased their gold holdings to nearly 2,600 metric tons � the most ever.

Why should I care?

Zooming out: Golden hour.

Gold was already on the up before its most recent surge, with its price rising last year to its highest level since 2013. That�s because the economic environment is pretty conducive to a shiny portfolio. With interest rates ultra-low, many investors would rather keep their money in gold � which may appreciate in value � than in cash that�ll likely see its value eroded thanks to inflation. And with over 80% of investors expecting US interest rates to go lower still in 2020, gold�may�remain popular for some time yet.


For markets: Pick palladium, or platinum?

Gold�s 18% gains last year were nothing compared to those of fellow precious metal palladium: its price shot up 53%. The surging demand for palladium � used in vehicle �catalytic converters� that turn toxic gases into harmless ones � surprised even the boss of mineral mining firm Anglo American, who told the Financial Times on Tuesday that he�d underestimated the impact of tightening auto emission standards. Supply shortages have boosted palladium�s price even further � but Anglo American�s boss thinks�this�will eventually cause demand to shift towards platinum, an alternative catalyst component. That�d be good news for investors in both platinum and in Anglo: the company is the world�s largest platinum producer.